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Should you consider getting an IVA?

Published: 12th March 2021 14:41

There is a lot to consider when it comes to IVA. One has to weigh the pros and cons of it, to understand whether it is a good debt solution for them or not.


What is IVA?

IVA is an Individual Voluntary Arrangement which is used for controlling your debts that seem to be unmanageable. It is a formal agreement that is presented to your creditors. With the help of this agreement, your creditor basically pays your unsecured debts off at a relatively  lower rate over a certain time span. If everything goes as planned, as written in the IVA, then your remaining debts are written off. However, keep in mind that everything must go as stated in the plan of your inidivual voluntary agreement.


IVA is not yet accessible in Scotland but if you are a resident of Scotland, you can use Trust Deed for this purpose. However, just like any other agreement or solution, IVA comes with its pros and cons too and one must consider all of them before getting into the process. Thus, we will be taking a deep insight to the good and bad side of this agreement, to understand whether it is the best solution for you, as an indiviual, or not.


Pros of IVA:

So what is the good that you get with this solution? Let’s see.


To begin with, IVA offers you more affordable payments. It will reduct the amount for you and will be less than what your creditor wishes you to pay per month. So that is a wonderful catch. Your creditor will set your monthly limit, according to what you can pay comfortably. Thus, if you have been beating yourself about unmanageable debts, IVA will definitely make everything easier for you.


Secondly, if your agreement goes as decided and is successful, your unsecured debt is written off. This helps you gain a fresh financial beginning. Moreover, IVA is a legal agreement and makes the process more transparent and legally binds you with your creditor. There are no loop holes and risks, if both thr parties stick to the agreement solely.


Cons of IVA:

Everything that benefits you, does come along with its downsides too. Firstly, it might damage your credit history. Any debt solution comes with this negative aspect. IVA shows on your credit history. Secondly, you would be required to release some kind of equity for IVA. it is best if you gain knolwedge about it before going for this financial agreement.


Is IVA for me?

IVA depends on your personal circumstances. It is not good or bad completely. You can always weigh other debt solutions too to find the best bet for yourself. You might find a plan that would suit your personal financial situation better. Thus, always look for professional advice before sorting out your debt issues. An expert will let you know about the pros and cons of each type of plan and make a wiser decision for you.

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